Archives for January 2001

Q. Does Getting Work Permit In Other Countries Ruin Your Application? As An It-Specialist, I Have Obtained Work Permit For Five Years Work In Germany But Still Want To Immigrate To Canada. Is This German Work Permit Regarded As A Negative Point In My Eligibility For Obtaining Canadian Permanent Residence?

Answer: The possession of an employment authorization in a different country, in itself, is not necessarily a negative factor. If an immigration official feels, however, that you do not intend to land in Canada an establish yourself as a permanent resident, it is possible for an application to be refused, and a new application requested at such time as you are ready to land.

Q. I am a Canadian Citizen living and working (for a Canadian employer) in the U.S. and have a green card pending (since March ’98). I have been here 6 years and met and married my husband (US Citizen) down here. We are considering a move back to Canada (my family/friends are there).

We have many many questions from taxes i.e. what to do with 401 K $ if we move up there, if we sell our house and make money and move up to Canada next year 2001, will we be taxed both in Canada and US on the earnings made from the sell of the house. Also immigration questions, if I return to Canada do I keep my old SIN # or will I need to get a new one (I guess I need to change my name on it but what about a new one).

How do I tell Canada I’m back? How do I tell the US I’m leaving? If I do obtain my green card before leaving (finally!), what then are the implications of excepting it?

As a Canadian Citizen, there are minimal immigration implications of your return to Canada. You would retain your priro Social Insurance Number, and employers would use that to remit the appropriate income taxes on your behalf. This would effectively indicate that you have returned as a resident. If your spouse is not a Canadian, then he would be subject to immigration requirements, which would be satisfied by a sponsorship application.

Richter, Usher & Vineberg:

From an income tax standpoint, the timing of the transfer of the funds into Canada is not relevant. As a Canadian resident, you are taxable on your world income from the point at which you became resident in Canada. Thus, any income earned on the amount left in the foreign bank account will be subject to Canadian tax beginning at that time. To the extent the same income is also subject to either a withholding tax or income tax in the country of origin, it may be possible to claim a foreign tax credit in Canada to eliminate the potential for double taxation.

Canada will only subject an individual to taxation on his world income once he has become a resident of Canada. Prior to that time, he will only be taxable on any employment income or business income earned in Canada as well as capital gains on the sale of “taxable Canadian property” (“TCP”) (i.e. shares of private Canadian corporations, Canadian real estate, etc).

As such, you will not be taxed in Canada on any income (except those sources mentioned above) before you enter into Canada. After that point, to the extent you still earn income in the U.S., you may be subject to tax in both Canada and the U.S. and you should be able to avail yourself of the foreign tax credit system to minimize or eliminate the double taxation possibility.

With respect to assets you hold upon leaving the United States, Canada will generally allow you to “bump up” your cost base to the fair value of the particular asset at the time you become a resident of Canada. As such, you will only be taxable in Canada on any future gains or losses computed with reference to the fair value of the asset at the time of immigration. It should be noted that this does not include TCP that are held by you and your husband. These assets will be taxable with reference to their original cost.

Your house in the U.S. is not TCP and as such you will not be taxed on the disposition if it occurs before you once again become a Canadian resident. If you dispose of the house after you have become once again a Canadian resident, you will be taxed in Canada to the extent of any gain or loss computed with respect to the fair market value at the time you again became resident in Canada.

From an income tax standpoint, you will notify Canada (and maybe the province in which you reside) of your return by filing an income tax return stating the date which you once again became resident in Canada.

It should be noted that you and your husband might continue to be subject to U.S. taxation in some manner as the U.S. reserves the right to tax its citizens regardless of their residence. The implications of your “green card” should be properly reviewed with US counsel. Again, as mentioned above, should any double taxation issues arise, this will be eliminated by virtue of the Canada-U.S. Income Tax Treaty.

From a Canadian tax perspective, your 401K plan will only be taxable in Canada when the benefits are paid, and the amount included in your income shall not include any amounts that would have been excluded from your income had you remained resident in the U.S. To the extent any U.S. tax is levied, you may request a foreign tax credit in Canada.

Disclaimer

The nature of this facility is to provide a general response to a general question. Under no circumstances should anyone act on this information without obtaining analysis and counsel from a qualified advisor with respect to the specific situation.

The Citizenship and Immigration Department has published a document, entitled “Who May Represent You,” outlining some of the factors that candidates considering professional representation should consider. In this document, the Department has clarified some of the differences between representation by a lawyer and representation by a consultant. Below are some of the points made in this regard:

* Only lawyers licensed to practise in Canada can represent you at the Federal Court.
* CIC can provide information on your file only to people who are either(1) Canadian citizens,(2) permanent residents of Canada or(3) physically present in Canada. Representatives who live outside Canada and are neither Canadian citizens nor permanent residents might be unable to help you.
* Be cautious when dealing with foreign-based representatives. Such companies or individuals may be outside the reach of Canadian law, and there may be no protection or remedy available in Canada to a dissatisfied client.

Lawyers

* Lawyers practising in Canada are regulated by provincial regulatory bodies. Only a lawyer who is a member in good standing of a provincial or territorial law society may practise law. The law societies regulate lawyers and can investigate complaints against members, impose discipline and provide financial compensation to clients who are victims of negligence or misconduct.

Immigration consultants

* Immigration consultants are not regulated by either the federal or provincial governments of Canada.

The distinction between a lawyer and a consultant is, certainly, not the only factor that should be considered in selecting professional representation. Determining that you are dealing with a knowledgeable and professional practitioner, lawyer or consultant, is most important. Applicants should bear in mind, however, some of the limitations on those outside of Canada, and the implications of those limitations on the ability of the representative to effectively assist you.

Employment increased by 31,000 in December. After pausing in June and July, employment has increased for five consecutive months, bringing gains over the year to 319,000 (+2.2%). This was slower growth than in 1999, when employment increased by 427,000 (+3.0%).

With the employment gain in December, the unemployment rate dipped 0.1 percentage points to 6.8%, ending the year where it began.

The increase in employment in December was equally split between full-time and part-time work. Since the upward trend in employment resumed in August, more 90% of the gains have been in full-time. Despite this recent upturn in full-time work, however, both full- and part-time employment increased at the same rate over the course of 2000 (+2.2%).